Building a business sounds basic – and it is. But many large incumbents struggle to make this a consistent success, creating openings for disruptions to grow.
Incumbents are well aware of the need to act quickly and boldly. What they often lack are robust processes to proactively explore what comes next, evaluate value propositions, and quickly test and learn their way to new scalable business ideas. It’s not really about chasing the latest trend or shiny thing – or vociferously opposing anything. It’s about unlocking actionable insights that drive sustainable investment in scalable ideas unique to your company.
The companies think of business building as an experimental machine that drives innovation and growth. It starts with identifying game-changing trends and thinking deeply about how they will transform markets, change customer behavior, and create new profit pools. In the coming years, we will see a lot of attention that offers strong potential for business building.
Roundness
what The basic understanding behind the circles is that waste should be treated as a resource. This includes both physical waste and capacity loss during production and distribution or at the end of a product’s life, the large amount of time most products are unused (think of a car sitting in a garage). Eliminating both types of waste helps companies use resources more sustainably and reduce costs. But it can provide opportunities to create new business models.
Why now? Circularity is not new, but it is experiencing a hot tailwind. Concerns about climate change from consumers, investors and governments are putting pressure on companies to use resources more sustainably. And geopolitical instability — Ukraine and China’s A&B exhibit — threatens raw material supply. Not surprisingly, this has encouraged many startups and large corporations to explore ways to use less. And Tap Potential Value in Wasted Capacity. Companies like IKEA and Bugaboo are designing products that can be easily repaired, serviced and recycled. Others are looking to business models such as rental or resale to create new consumer solutions that are circular and profitable.
What is he doing? While circular models are appearing in sectors from automotive to beverage, fashion is seeing a clear innovation boom. Catering to luxury brand shoppers who buy something, wear it a few times, and move on, second-hand clothing sites like The RealReal have sprung up to give fashionistas a place to monetize their cluttered closets. Fashion houses (which previously destroyed unsold products to prevent brand shortages) are responding by looking for ways to increase returns on new products or resell “pre-loved” items. That led to another site called Archive, working with A-list brands such as Oscar de la Renta, Quiana and Northern Fez to create online marketplaces for used goods. Galeries Lafayette in Paris also opened a department for high-end second-hand goods.
Digital assets
what Trillion dollar losses in cryptocurrencies? The collapse of so-called stablecoins? Seems like the digital asset fad has hit the wall, doesn’t it? Don’t count on it. Companies and investors who ignore blockchain or distributed ledger technology do so at their peril. There is no doubt that crypto and NFTs are both volatile and full of speculation and speculation. But early blockchain applications are providing a proof-of-concept for the underlying infrastructure that will eventually support widespread adoption.
Why now? Blockchain evangelists say the old Internet is being replaced en masse by a new, decentralized online ecosystem (Web 3.0), where everything from your identity to your mortgage is fickle and volatile. how about. Really Evolution, however, is ready to take hold. What we do know (depending on your industry) is that change can happen very quickly. Like the explosive growth of e-commerce or app-based services, what once seemed exotic can transform industries in the blink of an eye. As with previous paradigm shifts in technology, Web3 control points are emerging, and early adopters can benefit from first mover advantages.
What is he doing? Companies such as JP Morgan, Visa, MasterCard and Stripe are investing in various blockchain use cases to strengthen their leadership positions in finance. Gaming companies, consumer brands, and real estate players are exploring how to use programmable tokens to build loyalty, improve product functionality, and promote new products that leverage smart contracts. For example, Alfa Romeo is using NFTs to create transportable records for each car. The Australian Open revolutionized the world of tennis marketing by using NFTs to create a variety of new benefits for spectators.
Metaverse
what Metaverse is another flavor of web3 where digital assets like tokens and NFTs exist in virtual- or real-reality settings. It’s almost here: think about it Fortnite Users who regularly participate and interact in virtual environments. Full Web3 functionality and meaningful applications, however, require maturity in technology and communication infrastructure. How to make the virtual world work in the real world The global imagination is now awakening the possibilities.
Why now? That said, Metavas represents a shift in how people interact in cyberspace. It has the potential to impact our lives just as the smartphone-enabled Internet has. Like any technology, the Metaverse comes and goes. Early applications in games such as Roblox and Fortnite It may seem simple until you realize that real money changes hands in these gaming environments. (Roblox alone had $2.7 billion worth of virtual currency purchases by 2021.) All of this has forward-thinking companies exploring what’s possible in the metaverse and how to build businesses there. As with digital assets, first mover advantage can be critical.
What is he doing? The Roblox community has reached 9.6 billion hours of engagement in gaming by 2021, a robust digital economy based on Robux, the game’s virtual currency. In entertainment, a virtual concert by Travis Scott grossed $20 million, including revenue from virtual merchandise. In retail, startups like Gucci are setting up virtual storefronts and selling virtual clothes through digital avatars in virtual environments. Applications are also emerging in verticals such as healthcare (group mental and physical therapy sessions at scale) and education (virtual campuses to enhance learning and collaboration across geographies).
Artificial intelligence
what In recent years, most artificial intelligence (AI) applications have focused on internal efficiencies, such as optimizing delivery routes or self-service HR portals. But that is changing. As investment dollars continue to pour in, companies are using AI to create new products and services or enhance existing ones. This is not without controversy – ethicists and technologists continue to debate the dangers and promises of AI, but the field is growing exponentially.
Why now? Most companies these days collect more data than they know what to do with. Those who know how to get to work are creating new sources of income and in some cases changing industries. Now is the time to think strategically about what data assets you have and what new data sets you will acquire. Can AI be used to transform those assets into new products and services?
What is he doing? In pharmaceuticals, AI is finding its way into all stages of drug development. according to Chemical and engineering newsMajor pharmaceutical companies are collaborating with AI specialists at the biology level (target discovery and disease modeling), chemistry (virtual screening, retrosynthesis and small molecule generation) and clinical development (patient stratification, clinical trial design and trial outcome prediction). While the approval of drugs discovered and developed using AI is a hurdle — and some industry experts argue that targeted applications in the drug development process could make more sense — AI promises to change the industry’s way of drug development.
In automotive, Bosch is using AI to build a new solution that helps drivers find parking spaces. The company’s ultrasonic sensors equip cars to find open parking spaces when passing through traffic, even if the driver is not looking for a parking space. As more and more cars deliver this congestion data to the cloud, AI will analyze it, directing nearby drivers to available spots, making sure two drivers aren’t sent to the same spot or mistaking a driveway for an open space.
The business building principle here is universal: the information is available. How can we use AI to turn products that improve people’s lives?
The creative economy
what YouTube instructors, social media influencers, online product reviewers – creators are a new and complex set of stakeholders for companies blurring the lines between customer, product ambassador and critic. They are often power users themselves and can be used as a new sales channel to reach other users. When influencing purchasing decisions, they can have the power to hide companies themselves and can sometimes be competitive. Collectively, they are disrupting traditional media, sales channels and business models.
Why now? The creative economy has grown enormously over the past few years—an estimated $100 billioneS. One reason: Consumers are increasingly suspicious of big corporations and looking for the authenticity of creators. That’s forcing corporations to focus on their products and engage these innovators to inform the innovation process. Often, that means relinquishing a level of control over what these creators say and do — something many large companies find uncomfortable, but essential to maintaining the power of authenticity.
What is he doing? In the year Green, who closed a $110 million Series B funding round in 2021, valuing the company at $910 million, has created a platform that helps brands such as Warby Parker, Allbirds and Mejori manage their relationships with creators. The platform helps companies keep up with innovators, build authentic relationships with them, and then analyze how those relationships are performing. Another startup, Pietra, has emerged to provide business-building tools for entrepreneurs themselves. The platform connects social media entrepreneurs with packaging and fulfillment resources, e-commerce tools and suppliers. Pietra closed a $15 million Series A round in 2021, valuing the company at $75 million.
These are big global trends that promise to reshape industries. Consumer needs are changing, the technology available to meet those needs is evolving, and business boundaries may be redrawn. Companies that keep pace aren’t expecting to come out in the spotlight in the future. They are moving now to determine what comes next and positioning themselves to thrive.
Michaela Boyd is a Bain & Company partner overseeing the US strategy practice. Dunnigan O’Keeffe is a partner and leader of Bain & Company’s global strategy practice. Arpan Sheth is the Global Competency Leader for the Vector Solutions Group at Bain & Company.
